BUSINESS

Illinois adds ‘bad actor’ clause to sports gambling legislation

TAGs: Illinois, sports betting

Some of the sportsbooks hoping to get into the game in Illinois may have just had their dreams crushed. An amendment was added to legislation being considered to legalize sports gambling that, if approved, would prevent “bad actors” from stepping foot in the state. The clause could keep companies like DraftKings and FanDuel out of the Prairie State.

illinois-adds-bad-actor-clause-sports-gambling-legislationThe amendment was added last week to House Bill 3308 by Representative Bob Rita. It joins four other amendments that have been added to the legislation and stipulates that a vendor license or sportsbook operator’s license will not be issued to any entity that is or was affiliated with another company or entity that has accepted bets in contravention with any law in the state or the U.S.

This could mean that DraftKings and FanDuel would automatically be forbidden from seeking a license in the state. Both entities were offering daily fantasy sports gambling in 2015 and were found to be in violation of Illinois laws. They allegedly ignored a ruling by then state Attorney General Lisa Madigan and continue to provide their services to Illinois residents.

However, the amendment isn’t welcomed by all lawmakers. Some have expressed their belief that, without participation by the two companies, sports gambling competition in Illinois won’t be as heavy and the state won’t make as much in tax revenue as has been forecast.

The licensing fee would also be set at $10 million with another $50,000 due every 10 years for its renewal. This has casino operators in the state concerned, since most don’t believe they would be able to cover the initial fee. They feel that only companies like DraftKings and FanDuel have deep enough pockets and are supporting the amendment in order to ultimately have the fees reduced. If the two major sportsbooks are the only ones that can afford the license and are not allowed to operate in the state, the fees would have to be lowered if Illinois plans on capturing revenue from sports bets.

A vendor license would run $100,000 and can be renewed every 10 years for $50,000. Sportsbooks would be allowed to set up shop in a sports facility, provided the owner of the sports team or teams using that facility sign off on any deal.

Keeping out the big entities such as FanDuel and DraftKings seems counter-intuitive. They can help drive attention and competition in the space and would most likely provide a serious amount of fuel to feed the sports gambling fire in the state.

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